Will extra $63 million be enough to steer Munroe lease to HMA?

Munroe officials debate cash versus care

Published: Tuesday, March 19, 2013 at 10:31 a.m.

Last Modified: Tuesday, March 19, 2013 at 4:42 p.m.

Munroe Regional Medical Center officials weighing competing offers to lease the medical center to national hospital chains debated Monday whether the additional $63 million being offered by one of the companies should be a major factor in their decision.

Shands/Health Management Associates and Duke LifePoint both want to lease Marion County's 421-bed, non-profit facility. HMA is offering $200 million and an additional $200 million to make improvements to the facility. Duke LifePoint is offering $138.7 million, with a similar $200 million commitment for improvements.

Munroe's Strategic Options Work Group — comprised of doctors, administrators and hospital board members charged with investigating possible lease deals — met Monday to discuss their findings after visiting HMA and Duke LifePoint hospitals in recent weeks. The group visited HMA-owned Wuesthoff Medical Center-Rockledge in Florida and Duke University Medical Center in Durham and LifePoint's Danville Regional Medical Center in Danville, Va.

Munroe officials will visit two more hospitals this week.

The discussion Monday centered on the question of quality care versus money.

Work Group member Dr. Harvey Taub said that one issue to consider was each company's business culture, its compatibility with Munroe, and other hospitals they already have in Florida with which Munroe could collaborate and work.

Although LifePoint owns or leases nearly 60 hospitals in 20 states, its only Florida hospital is the relatively small Putnam Community Medical Center in Palatka.

HMA already owns or operates 22 hospitals throughout Florida.

But Taub said it looks as if Munroe has demonstrated a longer commitment to quality care than HMA.

He said HMA has recently incorporated corporate-wide quality control measures while Munroe has had a quality control officer in its ranks for the past 16 years.

Another issue that Munroe representatives are debating is their relationship with Shands at the University of Florida.

Some Munroe doctors complained that Shands has a history of competing in Marion County and poaching Munroe patients.

They also claim that Shands often won't accept their patients who need advanced care if the patients don't have good insurance or can't pay.

HMA and Shands may have addressed that concern in a meeting with Munroe doctors and administrators last week.

Steve Purves, Munroe president and CEO, said that during the meeting Shands agreed to accept any patients referred by Munroe doctors, regardless of their ability to pay. Purves said Shands offered to put the agreement in writing.

That meeting was not open to the public because only one Work Group member attended. If two had attended and discussed issues likely to be before the Work Group for a vote, it would have been open to the public, Hospital District trustee lawyer John Dean said Monday.

But Taub was skeptical.

"How do you ignore 10 to 15 years of a poor relationship?" he asked.

In response, Purves said one thing is certain: "If they're not in collaboration with us, they'll be in competition with us."

Munroe is owned by the state-sanctioned Marion County Hospital District and is overseen by seven trustees who are appointed by the County Commission.

The trustees lease the hospital to Munroe Regional Health System Inc., which is overseen by a 13-member board, some of whose members also are district trustees.

Without property tax support — a ballot measure failed in November — Munroe leadership says it must lease the hospital to a separate company to invest and keep the hospital competitive.

Once trustees lease the hospital, they plan to oversee the lease payment, using it to fund community health issues and initiatives.

Trustee Joe Hanratty said he's convinced that either Shands/HMA or Duke LifePoint could adequately operate Munroe, but "it's hard to ignore the $63 million question."

Trustee David Cope said he was just as concerned that whoever leases the hospital maintain the facility during the entire length of the lease and not stop making improvements as the lease nears its end.

The more money either of the two health care companies are willing to commit on the front end of the lease contract, the more likely they are to maintain the facility, Cope said. But Cope warned that 40 years was a long time and much could change about Munroe's health care market.

Ponder and Company executive Dave Atchison, hired by Munroe to oversee the lease process, said that although he understood concerns about how HMA or LifePoint might operate Munroe, both companies understood the value of protecting their reputations.

But Taub also pointed out that HMA typically purchases hospitals in financial trouble and that Munroe isn't in that situation yet.

"When leasing ... it's more than just the purchase price," Taub said.

Which of the two would be the best "strategic partner? Which is going to share our vision moving forward?" he asked.

But trustee Larry Strack said the richer offer by HMA suggests that HMA thinks more highly of Munroe's potential.

<p>Munroe Regional Medical Center officials weighing competing offers to lease the medical center to national hospital chains debated Monday whether the additional $63 million being offered by one of the companies should be a major factor in their decision.</p><p>Shands/Health Management Associates and Duke LifePoint both want to lease Marion County's 421-bed, non-profit facility. HMA is offering $200 million and an additional $200 million to make improvements to the facility. Duke LifePoint is offering $138.7 million, with a similar $200 million commitment for improvements.</p><p>Munroe's Strategic Options Work Group — comprised of doctors, administrators and hospital board members charged with investigating possible lease deals — met Monday to discuss their findings after visiting HMA and Duke LifePoint hospitals in recent weeks. The group visited HMA-owned Wuesthoff Medical Center-Rockledge in Florida and Duke University Medical Center in Durham and LifePoint's Danville Regional Medical Center in Danville, Va.</p><p>Munroe officials will visit two more hospitals this week.</p><p>The discussion Monday centered on the question of quality care versus money.</p><p>Work Group member Dr. Harvey Taub said that one issue to consider was each company's business culture, its compatibility with Munroe, and other hospitals they already have in Florida with which Munroe could collaborate and work.</p><p>Although LifePoint owns or leases nearly 60 hospitals in 20 states, its only Florida hospital is the relatively small Putnam Community Medical Center in Palatka.</p><p>HMA already owns or operates 22 hospitals throughout Florida.</p><p>But Taub said it looks as if Munroe has demonstrated a longer commitment to quality care than HMA.</p><p>He said HMA has recently incorporated corporate-wide quality control measures while Munroe has had a quality control officer in its ranks for the past 16 years.</p><p>Another issue that Munroe representatives are debating is their relationship with Shands at the University of Florida.</p><p>Under the HMA/Shands partnership, Shands would offer specialized and expert advice involving Munroe's patient care.</p><p>Some Munroe doctors complained that Shands has a history of competing in Marion County and poaching Munroe patients.</p><p>They also claim that Shands often won't accept their patients who need advanced care if the patients don't have good insurance or can't pay.</p><p>HMA and Shands may have addressed that concern in a meeting with Munroe doctors and administrators last week.</p><p>Steve Purves, Munroe president and CEO, said that during the meeting Shands agreed to accept any patients referred by Munroe doctors, regardless of their ability to pay. Purves said Shands offered to put the agreement in writing.</p><p>That meeting was not open to the public because only one Work Group member attended. If two had attended and discussed issues likely to be before the Work Group for a vote, it would have been open to the public, Hospital District trustee lawyer John Dean said Monday.</p><p>But Taub was skeptical.</p><p>"How do you ignore 10 to 15 years of a poor relationship?" he asked.</p><p>In response, Purves said one thing is certain: "If they're not in collaboration with us, they'll be in competition with us."</p><p>Meanwhile, Duke LifePoint oversees the day-to-day operations of its hospitals and makes necessary capital improvements. Duke oversees the clinical standards and helps its hospitals offer new services.</p><p>Work Group members said that between HMA and Duke LifePoint, HMA was more business oriented while Duke LifePoint touted its clinical orientation.</p><p>"The (Duke LifePoint) conversation was safety, safety, safety, while at (HMA) it is a little different," trustee Chairman Jon Kurtz said. "Whether it's worth $63 million, (that's the question)."</p><p>Munroe is owned by the state-sanctioned Marion County Hospital District and is overseen by seven trustees who are appointed by the County Commission.</p><p>The trustees lease the hospital to Munroe Regional Health System Inc., which is overseen by a 13-member board, some of whose members also are district trustees.</p><p>Without property tax support — a ballot measure failed in November — Munroe leadership says it must lease the hospital to a separate company to invest and keep the hospital competitive.</p><p>Once trustees lease the hospital, they plan to oversee the lease payment, using it to fund community health issues and initiatives.</p><p>Trustee Joe Hanratty said he's convinced that either Shands/HMA or Duke LifePoint could adequately operate Munroe, but "it's hard to ignore the $63 million question."</p><p>Trustee David Cope said he was just as concerned that whoever leases the hospital maintain the facility during the entire length of the lease and not stop making improvements as the lease nears its end.</p><p>The more money either of the two health care companies are willing to commit on the front end of the lease contract, the more likely they are to maintain the facility, Cope said. But Cope warned that 40 years was a long time and much could change about Munroe's health care market.</p><p>Ponder and Company executive Dave Atchison, hired by Munroe to oversee the lease process, said that although he understood concerns about how HMA or LifePoint might operate Munroe, both companies understood the value of protecting their reputations.</p><p>But Taub also pointed out that HMA typically purchases hospitals in financial trouble and that Munroe isn't in that situation yet.</p><p>"When leasing ... it's more than just the purchase price," Taub said.</p><p>Which of the two would be the best "strategic partner? Which is going to share our vision moving forward?" he asked.</p><p>But trustee Larry Strack said the richer offer by HMA suggests that HMA thinks more highly of Munroe's potential.</p><p><i>Contact Fred Hiers at 867-4157 or fred.hiers@starbanner.com.</i></p>